Credit debt relief refers to the total or partial erasing of debt. It refers to the stopping of the growth of debt. Either the growth is stopped or slowed down for the time being. These debts can either be incurred by an individual or a corporation or a nation. Debts are taken by the countries of the Third World. Some sought of relief are given to these countries so that the development work there is not hampered.

Credit debt relief for the underdeveloped and developing countries was the subject of discussion during any international meetings in the 1990s. Money was granted to the NGOs so that relief and development could be carried on. During the 1998 G8 meeting in Birmingham various demonstrations were carried on so that the debt relief could be put into the meeting’s agenda. The demonstrations were successful and relief was granted to the developing countries.

The countries that were granted credit debt relief had to see that the relief money was spent in the field of poverty education. The relief was provided to the poorest countries from the funds of International Monetary Fund and World Bank. Initiative was taken to provide the poorer countries with systematic debt opportunities. The Third World countries had to see that the relief money was spent for relief and education work.

To provide credit debt relief to the Heavily Indebted Poor Countries (HIPC) a special programme has been undertaken by the International Monetary Fund and World Bank. The countries are instructed to spend certain amount of money on supply of water and electricity. To help reduce inflation some countries have been told to spend less money in the field of health and education. This is because the World Bank wants that proper development should be done in every field.

There are many developed countries who do not favour the idea of credit debt relief that are granted to the underdeveloped nations. Many think that due to corruption the money meant for the poor will in no case reach the poor. Once the relief is granted some countries will take help of some other sources to get more debts thinking that these debts will also be forgiven in the near future.

The money that was given as credit debt relief is often used to enhance the wealth of the rich. The money does not reach the necessary sector and are used for other purposes than relief. The money could have been spent for some specific aid projects meant for the up liftment of the poorer section of the society. This widens the gap between the poor and the rich and increases the economic dependence of the country.